- The S&P 500 and Dow both hit record closing highs for a second session, having recovered from a pre-market sell-off.
- The Nasdaq 100 was unable to recover into the green as rising long-term interest rates weighed.
- Strong US data, reopening/pandemic optimism and fiscal stimulus optimism all helped support risk appetite.
In the end it was a mixed day on Wall Street, with the S&P 500 closing the session up 0.1% in the 3940s at another record closing high (though the index failed to hit a fresh intra-day all-time high). The Dow performed even better, rallying 0.9% and also closing at record levels, but the Nasdaq 100 dropped 0.9%. On the week, the S&P 500 closed with gains of 2.6%, the Dow finished up more than 4% (it’s best week since November), while the Nasdaq 100 gained 2.1%.
In terms of sectoral performance; as noted, Big Tech suffered which dragged the S&P 500 Information Technology and Consumer Discretionary GICS sectors lower (down 0.9% and 0.7% respectively). Semiconductor makers also performed poorly, dropping nearly 1.1%. Meanwhile, the S&P 500 Real Estate, Industrials and Utilities sectors performed the best (gaining 1.5%, 1.3% and 1.3% respectively).
Driving the day
The major indices started the session in the red, with equity index futures having sold off in pre-market trade amid surging US government bond yields. While higher long-term borrowing costs continued to weigh on Big Tech names, growth stocks and other high price-to-earnings ratio names, eventually sentiment in the rest of the market turned positive amid a combination of 1) strong US data (the preliminary March Michigan Consumer survey was a big beat on expectations) 2) pandemic optimism (US President Joe Biden set the target of 4 July being the USA’s “independence day from Covid-19”) and 3) US fiscals stimulus optimism (after US President Joe Biden signed his $1.9T “rescue” package into law on Thursday).